Both houses of Congress are (again) considering a "Performance Rights Act" …

Share this story

The "Performance Rights Act" has been introduced in both the House and Senate with the goal of forcing US radio stations to start paying artists whose music is played on the air. Labels are pushing hard for the idea, but radio stations could hardly be more upset.

When it comes to music, US "performance rights" law looks like a floodlit monument to inconsistency. Radio stations pay only songwriters for the music they play; recording artists get nothing (except publicity). When music is delivered through webcasting, cable networks, and satellite radio, however, station owners need to pay both songwriters and recording artists.

If the law is internally inconsistent, it's also externally inconsistent—most developed nations require radio stations to pay artists. A2IM, which represents indie labels, makes the point by saying, "of world powers, only countries like China, Iran, and North Korea join the US in failing to compensate creators of music when their songs are played on the radio."

So how to patch up the situation? One obvious way would be for Congress to force radio to pay performance royalties to recording artists—though, in reality, a good chunk of this money would go to the labels who have funded those artists. Because of the cash involved, the RIAA has been pushing hard to enact a performance rights bill for years, but it has become an even more urgent priority as record company revenues have fallen and can't get up.

The reintroduction of the Performance Rights Act to Congress means that the labels are gearing up to fight the old battle once more in a new Congress, but they will face the same stout opposition they always have.

A can of red herrings?

"This legislation is about fairness and a level playing field, plain and simple," said RIAA CEO Mitch Bainwol. "The arguments for this legislation have never been more compelling, the time never more ripe, and the level of support within the music community never more strong. Every one of the competitors of FM and AM radio pays artists and labels for the use of their music... The reasonable concerns of small broadcasters have been addressed in this bill. Nonetheless, the National Association of Broadcasters continues to thumb its nose at Congress and refuse to come to the table in good faith."

The National Association of Broadcasters, not content to take this from a bunch of "companies based overseas" (a reference to EMI, Sony BMG, and Universal), has already set out to defend "hometown radio stations" from the scourge of a new "performance tax." Radio stations defend their traditional arrangement by pointing out the publicity value to artists from radio play.

The Free Radio Alliance also sounded the xenophobic trumpet—pitting radio's "family-supporting jobs," "local community support of non-profit and service organizations," and "diversity" against the "big, foreign-owned labels."

Cue the montage of apple pie and a mustachioed French banker. (If you think this overstates the situation, consider what the NAB said in 2007 when this issue came up the last time: "After decades of Ebenezer Scrooge-like exploitation of countless artists, RIAA and the foreign-owned record labels are singing a new holiday jingle to offset their failing business model.")

Not that the labels and artists have been above this sort of stunt. Before Congressional hearings on the matter in 2008, they sent a can of fish to the National Association of Broadcasters as a way of suggesting the broadcasters' ideas were only "red herrings." Paging the grownups!

As a "debate," this sort of thing has the distinct air of the schoolyard about it; one hopes that more thoughtful and interesting presentations are taking place privately. But it's also understandable given the long history of animosity between the groups, and the amount of money at stake here.

The law, if passed, won't just affect the US. Because the US currently doesn't have a radio performance right, US radio stations pay nothing to foreign recording artists when they play their songs. That might not sound like a big deal until you realize that foreign countries generally exempt their own broadcasters from paying to play US music on the air because of this situation. The lack of a performance right is therefore "an inequity that costs American artists tens of millions of dollars each year" from overseas stations, according to the RIAA.

The bill didn't pass the last time around, but with "change" hanging heavy in the air, who knows what's possible in a new session of Congress. Last time the issue arose, the NAB helped to spearhead a countering resolution, which eventually attracted 226 House co-sponsors, and a similar countering resolution is due to be introduced shortly.